Bubble pricked: Tata Motors dispels Romanian factory rumor

Tata Motors has just announced that it has no plans of acquiring the old Nokia factory at Romania and using it to produce Tata cars in that country, thus dispelling the rumor about the Indian car and utility vehicle major making a foray into Europe with a Romanian manufacturing facility. This means that Tata Motors will continue to have a limited presence in Europe with cars like the Aria, the Safari and Vista hatchback selling in limited quantities in select European markets like Spain and Italy. Exports to these countries are expected to continue based on the demand for Tata’s cars.

2012 Tata Nano Special Edition Hatchback

2013 Tata Nano Special Edition Hatchback used as an illustration

Tata Motors is having a mixed time at the hustings. While the Jaguar-Land Rover acquisition is doing very well for the Indian automaker, domestically Tata is facing challenging times on the back of falling sales. Tata cars have lost ground to products from rivals like Mahindra in India while the commercial vehicle space in India has also been hurt due to the overall slowdown in economic growth. Tata Motors has put plans in place to arrest its slide in the Indian car market and the results of this plan involving the introduction of new car variants will pan out in the next 12-18 months.

In India, Tata Motors will be betting on the Nano CNG and Nano Diesel, two cars that are expected to put the bang back in Tata Motors’ Nano sales. The Nano has been a tepid seller at best, leaving Tata Motors with a large unused capacity at its Sanand factory in Gujarat, a facility tailor made to build the Nano with an annual capacity of 250,000 units. Far from this figure, Tata Motors has managed to sell less than 100,000 Nanos in 2012, a figure that represents less than 40% of the total capacity of the Sanand factory.

This has led to the Sanand plant being a loss making proposition for Tata Motors given the fact that it needs to sell at least 150,000 cars a year for the facility to operate at 60% of its capacity and therefore break even. Apart from the Nano, Tata is also betting on the introduction of new variants of its existing cars to boost sales in India. The Tata Manza is expected to spawn a compact sedan version while the Tata Vista Xtreme concept is expected to become the Tata Vista Cross, a crossover variant of this hatchback. The Safari Storme SUV and the Tata Aria Crossover could also see upgraded versions being launched.

Source AutoNews

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